‘Sloppy’ Consolidation
With S&Ps trading around 895, we would expect more of a “sloppy consolidation” until the market makes its next move. As we mentioned in the Morning Meeting, given the activity in the Globex session overnight and the large gap opening, we would expect a quieter day session as the market digests this move.
On the upside, SPs would have to show activity above 895 to get the market moving, and bounce quickly at the 894.30-893 area. Above that, the targets are 896.50-897, then 898.50 and the possibly 899.50. On the downside, below 893, the targets would be 891-890, then 887 and 885.
Nasdaq has seen a mediocre bounce thus far off 1081-1080. This market will have to show staying power above 1085 to encourage any buying. If that happens, upside targets would be 1087-1087.50, then 1090, and possibly 1092. On the downside, if below 1083, they should test the 1080 area again and then 1078.